#1
Know Yourself
"The game taught me the game. It takes time to learn your own weaknesses and strengths as a trader."
Experience teaches you your own psychological patterns.
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Jesse Livermore⭕ Circle of Competence
Jesse Livermore's Circle of Competence Rules
Jesse Lauriston Livermore (July 26, 1877 – November 28, 1940) was an American stock trader considered one of the greatest traders in history. He made and lost several fortunes during his career, including famous profits during the 1907 and 1929 market crashes. Livermore began trading at age 14 in Boston bucket shops and developed his own methods for reading market...
3 principles·Circle of Competence
3 Key Circle of Competence Principles
#2
Know Your Limits
"The most successful investors stay within their circle of competence. Know what you understand well and resist the temptation to venture outside it."
Stay within your circle of competence.
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Deep Understanding Required
"Surface-level knowledge is dangerous in investing. Develop deep expertise in your areas of focus. True understanding means knowing what could go wrong."
Develop deep expertise, not surface knowledge.
Read Full Analysis →Frequently Asked Questions
What are Jesse Livermore's key circle of competence principles?
Jesse Livermore has 3 key principles on circle of competence. The most important one is "Know Yourself" — The game taught me the game.
How does Jesse Livermore apply circle of competence in practice?
Jesse Livermore applies circle of competence through several key principles including "Know Yourself" and "Know Your Limits". These principles guide practical investment decisions and have been tested across decades of market cycles.
What makes Jesse Livermore's approach to circle of competence unique?
Jesse Livermore's approach to circle of competence is distinguished by a focus on long-term thinking and fundamental analysis. With 3 specific principles in this area, Jesse Livermore provides a comprehensive framework that investors at any level can study and apply to improve their decision-making.
